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Regio Taxi evaluates the purchase of a car to provide its services. 3 scenarios are proposed with the following results: In a normal scenario, with
Regio Taxi evaluates the purchase of a car to provide its services. 3 scenarios are proposed with the following results: In a normal scenario, with 45% probability, IRR = 14%. In the optimistic scenario with a 25% probability the IRR = 16%. And in a last scenario the IRR = 8%. If the MARR is 13%, the decision would be:
Do not buy the taxi because the probability that the IRR exceeds the MARR is 70% Buy the taxi since the IRR is most likely 14% Buy the taxi and choose the optimistic scenario since its IRR is 16% Do not buy the taxi because the expected IRR is 12.7%
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